Court Gives Few Clues In Property-rights Case

WASHINGTON — In a case that pits property owners against environmentalists, the U.S. Supreme Court heard arguments on March 2 on the question of when is a landowner entitled to government compensation after regulation strips a property of its value.

In the case of David H. Lucas v. the South Carolina Coastal Council, coastal property owner Lucas is asking for $1.2 million in compensation from the defendant, after the state agency outlawed construction to halt beach erosion.

Lucas, a developer by trade, paid $957,000 for two lots, one of which he intended to build his personal residence on and the other he planned to hold as an investment. A decision in the case is not expected until May or June.

Environmentalists are worried the high court could hand down a broad decision ``devastating to environmental laws`` and other governing land use issues, said David Orr, a spokesman for the environmental group Greenpeace. Government agencies, Orr said, would back away from protecting the environment from degradation because they could not afford to pay for the cost of acquiring all the land affected by such laws.

Property owners, on the other hand, would welcome such a broad decision as relief from the unfairness of saddling a property owner with the cost of protecting land as a public benefit enjoyed by all, said Mary DiCrescenzo, an attorney with the National Association of Home Builders.

Essentially, Lucas claimed that he was entitled to compensation regardless of the merits of the law because he was economically damaged. Conversely, the coastal council invoked the ``public nuisance exemption,``

arguing it owes no compensation regardless of what threat to public safety its law is aimed at controlling.

In characterizing the arguments presented by both sides as ``two extreme positions,`` Justice Antonin Scalia gave some hint that the court is looking for a middle ground to decide the case, said Roger Marzulla, a Washington, D.C. constitutional rights attorney.

``It seems to me the court is attempting to fashion a rule that draws a line (as to which) regulatory incursions give rise to compensations and those that do not,`` Marzulla said.

Likewise, University of Chicago law professor Richard A. Epstein said his ``basic sense`` of the court`s view of the matter is that ``both positions argued were indefensible.`` Yet, while the court may look ``for an

intermediate ground`` on which to decide the case, Epstein said he had doubts about whether the justices will find it.

Under questioning from Scalia, Lucas` attorney, A. Camden Lewis, answered affirmatively when Scalia asked whether ``any use of the police power that takes away total economic value of the land no matter what the basis for the police power`` entitled his client to compensation.

Scalia also pointedly asked C.C. Harness III, attorney for the coastal council, about the health and public safety aspects of the ``great threat that over the next 50 years some . . . land might erode.`` Harness replied that storms could easily rupture sewer and water line on fragile oceanfront properties.

Based on that line of questioning, John J. Delaney, a land use attorney from Silver Spring, Md., said he believes that the ``further government gets away from pure health and safety reasons, the closer the court will scrutinize`` the validity of the nuisance exception. The South Carolina law, he noted, emphasized tourism and the economic benefits of halting beach construction.

The court`s decision in the matter, Delaney said, could well force regulators ``to do a better job of establishing the nexus between the exaction (the $1 million property loss in Lucas` case) and the public purpose to be achieved.``

Justice Sandra Day O`Connor seemed troubled by the inequity of applying the public nuisance principle to new construction while ignoring the existing beach homes that bank both sides of Lucas` property. Harness` legal theory, she said, could ``force existing houses to be removed and no compensation paid.``

However, David A. Doheny, acting president of the National Trust for Historic Preservation, said he now doubts the court is prepared to radically alter the existing law balancing the public interest against property right.

``The assumption was that since the lower courts first ruled for the property owner is that the (Supreme) court had a serious agenda of changing the existing law as it relates to property rights. . . . There did not seem to be much support for the Lucas theory to throw out the entire nuisance exception,`` he said.

John Echeverria, chief council for the National Audubon Society, said he came away from the oral arguments convinced that the court cannot reverse the South Carolina Supreme Court, which found Lucas was owed no compensation, because Lucas did not challenge the basis for the regulation.

Nonetheless, the court could very well kick the matter back to the lower court for rehearing over technical considerations, a number of observers said. Two years after passing the original law, the South Carolina legislature approved amendments giving affected property owners a variance to apply for a building permit.

It remained unclear from the oral arguments, however, whether Lucas had effectively exhausted his administrative remedies before seeking judicial relief because his case was already in litigation before the right to apply for a building permit was granted.

Echeverria said he applauded the implication of questions O`Connor put to Lewis that if Lucas could not prove he intended to build a house during the two years between the legislative acts, then his claim of harm was moot.